STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
JAMES I. McKEE, R.P.T.; JAMES ) CONE, R.P.T; and RAY CRALLE, R.P.T, )
)
Petitioners, )
)
vs. ) CASE NO. 81-1383RP
)
DIVISION OF WORKERS' ) COMPENSATION, DEPARTMENT OF LABOR ) AND EMPLOYMENT SECURITY, )
)
Respondent. )
)
FINAL ORDER
Petitioners, James I. McKee, James Cone, and Ray Cralle, filed a "Petition for Administrative Determination of Invalidity of Proposed Rule." Petitioners are seeking an order declaring that those provisions of proposed rules of the Division of Workers' Compensation, Department of Labor and Employment Security, which set a fee schedule for compensating registered physical therapists under Florida's workers' compensation system, constitute invalid exercises of delegated legislative authority. By Order entered May 19, 1981, the Director of the Division of Administrative Hearings dismissed the petition with leave to amend. An Amended Petition was filed, and the Director entered an Order on May 29, 1981, assigning the matter to the undersigned Hearing Officer. The final hearing was originally scheduled to be conducted on June 26, 1981. Upon motion of Petitioners, the hearing was continued and rescheduled for July 10, 1981.
The issues in this proceeding are whether the Division of Workers' Compensation has statutory authority to establish a fee schedule to be applied to registered physical therapists who treat injured workers and receive payment for their services from workers' compensation carriers; whether the proposed rules are invalid because they do not account for differences in charges among communities in the state; and whether the economic impact statement prepared in support of the proposed rules is adequate.
The parties have submitted proposed findings of fact and conclusions of law To the extent that the proposed findings and conclusions have not been expressly adopted herein, they have been rejected as not supported by the evidence or as irrelevant to the issues.
FINDINGS OF FACT
The Petitioners James I. McKee and James Cone are registered physical therapists licensed in Florida under Chapter 486, Florida Statutes. Petitioners McKee and Cone are engaged in the private practice of providing physical therapy services. Physical therapy is the treatment of injured or crippled individuals through physical agents such as heat, ultrasound and electrical stimulation treatments, and therapeutic exercise. Physical therapy patients are referred to private practitioners such as Petitioners by prescription from physicians.
Petitioners, as a substantial part of their practices, treat workers who have been injured in job-related accidents and receive payment for their services from workers' compensation insurance carriers.
Respondent is the state agency responsible for administering the workers' compensation program in Florida. Respondent has proposed Rules 38F-
7.01 through 38F-7.03 and 38F-7.10 through 38F-7.13 for adoption. These proposed rules constitute the proposed fee schedule for the workers' compensation program, and include a proposed fee schedule for physical therapy services. The proposed fee schedule was presented to the Respondent by a three- member panel consisting of the Secretary of Labor and Employment Security, the State Insurance Commissioner, and the State Medical Consultant of the Division of Workers' Compensation.
Respondent's rules have not in the past included a fee schedule for physical therapy services provided by practitioners such as Petitioners McKee and Cone. Rather, such services have been compensated on the basis of a case- by-case determination of the charges that prevail in the same community for similar treatment of injured persons of like standard of living. The proposed fee schedule would set maximum limits for such fees. The proposed fee schedule would have applicability statewide. Different fee schedules for different geographic locations have not been proposed.
Petitioners McKee and Cone presently charge higher fees for injured workers and receive more compensation than they would receive under the fee schedule set out in the proposed rules. Furthermore, prevailing fees charged by physical therapists are generally higher than the maximum fees set out in the proposed rules.
There is a statistically significant difference in fees for physical therapy services that are charged in different areas of the state. Fees for services in Southeast Florida are uniformly higher than fees for the same services in other areas of the state.
The three-member panel which proposed the fee schedule for physical therapy services considered the present fee schedule, which does not set maximum charges for physical therapy services; a schedule utilized under the medicare program for physical therapy services; and a schedule set out in a document prepared by the Florida Medical Association, Inc., entitled "1975 Florida Relative Value Studies." No consideration was given to setting different fees in different areas of the state. The medicare schedule considered by the panel sets different rates for different areas of the state. The panel utilized a schedule in the mid-range from the medicare schedule in arriving at its proposed schedule.
Respondent promulgated an economic impact statement in support of the proposed rules. The economic impact statement does not contain any estimate of the economic impact of the proposed fee schedules upon physical therapists such as Petitioners . The panel which proposed the schedules did hear objections from various physical therapists, but did not change its proposed schedule in response. The proposed schedule has a significant economic impact upon physical therapists because there has not been a maximum fee schedule applied to physical therapists in the past. Furthermore, the schedule would allow less compensation to such therapists than has typically been allowed in the past.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.54(4), Florida Statutes. Petitioners McKee and Cone are substantially affected by provisions of the Respondent's proposed Rules 38F-7.01 through 38F-7.03 and 38F-7.10 through 38F-7.13 in that the proposed rules include a maximum fee schedule that would be used to determine the amount of compensation that Petitioners McKee and Cone would receive for services provided under the workers' compensation program.
No evidence was received or presented with respect to the Petitioner Cralle. No conclusion can be drawn as to whether he is substantially affected by the proposed rules. The petition is dismissed as to him.
Section 440.13(3)(a), Florida Statutes, provides:
All fees and other charges for such treatment or service, including treat- ment or service provided by any hospi- tal or other health care provider, shall be limited to such charges as prevail in the same community for similar treatment of injured persons of like standard of living and shall be subject to rules adopted by the division, which shall annually incor- porate schedules of maximum charges for such treatment or service as determined by a three-member panel, consisting of the Secretary of Labor and Employment Security, the Insurance Commissioner, and the state medical consultant of the Division of Workers' Compensation. An individual health care provider shall be paid either
his usual and customary charge for a treatment or service or the maximum charge, whichever is less.
Respondent's statutory authority to adopt the proposed rules is based upon this provision. Petitioners contend that Respondent has no authority to adopt any fee schedule for physical therapy services. Petitioners argue that there is authority for adopting maximum fee schedules only for health care providers. "Health care providers" are defined under the statute as specific practitioners, not including physical therapists. Section 440.15(3)(d)1d, Florida Statutes.
Insofar as physical therapists can be compensated at all under the workers' compensation program, it is under the provisions of paragraph (3)(a) of the statute. The statute sets the standard for such fees to be prevailing community standards. The statute leaves Respondent with latitude as to whether prevailing community standards should be determined through case-by-case adjudication or rule making. See: McDonald v. Department of Banking and
Finance, 346 So.2d 569 (1 DCA Fla. 1977). In the past, the Respondent has relied upon case-by-case adjudication, but it is now proposing to utilize rule making. Nothing in the statute prevents this approach. Petitioners' contention that Respondent lacks authority to adopt a fee schedule for physical therapists is without merit.
Petitioners contend that assuming Respondent has authority to adopt a fee schedule for physical therapy services, the schedule set out in the proposed rules is invalid. The statute provides that the fees and charges "shall be limited to such charges as prevail in the same community for similar treatment .
. . ." The proposed rules set a single fee schedule that would be applied statewide. Petitioners correctly contend that a single statewide fee schedule does not reflect prevailing community charges. The word "community" is not defined in the statute. In construing the statute, the word should be given its ordinary meaning. Department of Health and Rehabilitative Services v. McTigue,
380 So.2d 454 (1 DCA Fla. 1980). The term "community" in its ordinary sense would contemplate a geographical unit smaller than an entire state. Indeed, the fact that the Legislature chose to tie appropriate charges to community standards evidences an intention that differing standards that may exist among various communities within the state be considered in determining appropriate charges. The evidence in this case clearly establishes that there are such differences. The proposed fee schedule relating to physical therapists, however, in an apparent quest for simplicity, does not account for the differences. In considering the proposed rules, neither the Respondent nor the three-member advisory committee considered any possibility other than a state wide fee schedule. Agencies do not have inherent rule making authority.
Section 120.54(14), Florida Statutes. Agency rules must be consistent with enabling statutes, and may not amend or repeal a statute. Department of Health and Rehabilitative Services v. Florida Psychiatric Society, 382 So.2d 1280 (1 DCA Fla. 1980). Respondent's adoption of a statewide fee schedule constitutes an amendment to the legislative mandate that charges be based upon community standards.
Petitioners contend that the proposed rules are
invalid because they are not supported by an adequate economic impact statement. Section 120.54(2), Florida Statutes, provides that in proposing rules, an agency must prepare a detailed statement describing the economic impact that the proposed rules would have upon the agency and all persons directly affected by the rules. Failure to provide an adequate economic impact statement is grounds for holding a proposed rule invalid. Section 120.54(2)(c), Florida Statutes.
The proposed fee schedule would have an economic impact upon physical therapists such as Petitioners; and, since there has been no fee schedule relating to physical therapists in the past, the impact is significant. The economic impact statement that Respondent prepared in support of its fee schedule contains no mention of the economic impact upon physical therapists. The proposed rules therefore constitute invalid exercises of delegated legislative authority.
Respondent contends that any failure in the economic impact statement is not such as to require that the proposed rules be invalidated. In School Board of Broward County v. Gramith, 375 So.2d 340 (1 DCA Fla. 1979); and Polk v. School Board of Polk County, 373 So.2d 960 (2 DCA Fla. 1979), it was held that specific defects in an economic impact statement will not render a rule invalid unless it is shown that the error impaired the fairness of the rule making proceeding or the correctness of the action taken by the agency. The purpose of requiring an economic impact statement is to assure that agencies will analyze economic factors during the course of rule making. Florida-Texas Freight, Inc.
v. Hawkins, 379 So.2d 944 (Fla. 1979). The Court stated: (at p. 946)
By this provision [Section 120.54(2)(a)] the legislature seeks to promote agency introspection in administrative rule- making. The process of formulating rules and regulations involves an interplay between social and economic factors and the legislative goals underlying agency action. In order
to ensure a comprehensive and accu- rate analysis of economic factors in this calculus, the legislature has instructed an agency . . . to prepare an explicit statement delineating the short- and long-term economic conse- quences of a proposed rule. Such a procedure directs agency attention to certain key considerations and thereby facilitates informed decision making.
It also serves the salutary purpose of opening up the administrative pro- cess to public scrutiny.
The Respondent's failure to even mention the significant economic impact that its proposed rules have upon physical therapists cannot be considered harmless error. While Respondent may have had before it data respecting this impact, unless it is set out in the economic impact statement, there is no means of determining how the agency viewed the data. Indeed, it cannot be determined that the agency considered it at all, and the purpose of requiring the economic impact statement is frustrated. The fairness of the rule making proceeding is impaired because considerations which the Legislature has required are not articulated.
Respondent contends that its proposed rules cannot constitute invalid exercises of delegated legislative authority because the Respondent has no discretion except to adopt as rules a fee schedule proposed by the three-member advisory panel described at Section 440.13(3)(a), Florida Statutes. This argument is without merit. The advisory panel is required to propose fee schedules to the Respondent, and the Respondent is required to adopt schedules as rules. The statute cannot, however, be construed as leaving the validity of proposed fee schedules beyond challenge.
Petitioners contended in the petition that the proposed schedule improperly delegates fee setting authority to insurance carriers. This contention is not supported by the evidence.
The proposed fee schedule for physical therapists constitutes an invalid exercise of delegated legislative authority because it is not based upon prevailing community standards and because it is not supported by an adequate economic impact statement.
FINAL ORDER
Based upon the foregoing findings of fact and conclusions of law, it is, hereby,
Those portions of the Respondent's proposed Rules 38F-7.01 through 38F-7.03 and 38F-7.10 through 38F-7.13 which set a fee schedule for compensating physical therapists who perform services under Florida's workers' compensation program constitute invalid exercises of delegated legislative authority, and the proposed rules are hereby declared to be invalid.
DONE AND ORDERED this 6th day of August, 1981, in Tallahassee, Florida.
G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Department of Administration
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 6th day of August, 1981.
COPIES FURNISHED:
Leslie King O'Neal, Esquire Graham, Markel, Scott, Marlowe, Appleton & McDonough, P.A.
Post Office Drawer 1991 Orlando, Florida 32802
Michael J. Rudicell, Esquire Department of Labor and Employment Security
2562 Executive Center Circle, East Suite 117, Montgomery Building Tallahassee, Florida 32301
Carroll Webb, Esquire Executive Director
Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32301
Ms. Liz Cloud, Chief
Bureau of Administrative Code Department of State
1802 The Capitol
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Aug. 06, 1981 | CASE CLOSED. Final Order sent out. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 06, 1981 | DOAH Final Order | Proposed rule regulating fees for physical therapists is invalid because it ignores community standards and has inadequate economic impact statement. |
